India leads the world in real-time digital payments, says PM Modi

Success shows 'innovation prowess' of indigenous payment structure and fintech companies, he says

India leads the world in real-time digital payments by clocking almost 40 per cent of all such transactions, said Prime Minister Narendra Modi on Independence Day as he praised the Unified Payment Interface (UPI) and the fintech sector.

Digital payments have grown in India in the last two years of the coronavirus pandemic, mainly due to the mass adoption of UPI for daily transactions. The Reserve Bank of India’s (RBI) digital payment index (DPI), launched in January 2021, reflects this milestone.

DPI rose to 349.30 as of March 2022, compared to 304.06 in September 2021. In March 2019, the index stood at 153.47 and by September 2019 it rose to 173.49. UPI clocked 6.28 billion transactions amounting to Rs 10.62 trillion in July, a record high for India’s flagship digital payments platform since its inception in 2016.

In FY22, UPI processed more than 46 billion transactions amounting to more than Rs 84.17 trillion. In FY21, it had processed 22.28 billion transactions, amounting to Rs 41.03 trillion. So, both volume and value of transactions doubled in a year’s time. UPI’s next target is to process a billion transactions in a day in three or five years.

"Today, we have many success stories to show to the world--UPI-BHIM, our digital payments, our compelling position in the domain of Fintech. Today, in the world, 40 percent of real time digital financial transactions are happening in my country. India has shown innovation prowess to the world," Modi said in Delhi at the Red Fort.

A recent report by PhonePe and Boston Consulting Group said India’s digital payments market will more than triple from $3 trillion to $10 trillion by 2026. Digital payments (non-cash) will constitute nearly 65 per cent of all payments by 2026 i.e., 2 out of 3 transactions (by value) will be digital.

“Leading the world of fintech with 40 per cent digital transactions across the globe, UPI & BHIM are owning the space”, the National Payments Corporation of India (NPCI) said on Twitter on Monday. NPCI is the umbrella body for digital payments in the country.

The JAM trinity (Jan Dhan, Aadhaar, mobile) has been instrumental in the adoption of digital payments in the country. A combination of bank account penetration through the Jan Dhan Yojana program, wherein 440 million bank accounts have been opened so far; 1.25 billion Aadhaar-based unique identification numbers enabling KYC; and low-cost internet accessed by more than 750 million users have acted as the foundation for the relentless growth in digital payments.